A pro-poor agenda

India’s new Finance Minister Arun Jaitley has just unveiled his union budget – that in addition to continuing the policies of the previous government, pays heed to the poll promises made by the Bharatiya Janata Party. There is plenty to analyse in this budget, but I want to draw attention to a possible boring, but vital, agenda for the new government – the pro-poor welfare agenda.

The pro-poor welfare agenda is not about doles – it is about having an effective social safety net for the poor and the vulnerable to enable them to realise their potential. It is not just about free grains or laptops – it also rests on ensuring equal access to quality healthcare and education and equitable access to economic opportunities.

Contrary to popular belief, for the last two years, the UPA government has shrunk the budget, in real terms, for national flagship welfare schemes. In its budget, this government does the same. One can justifiably argue that given the poor implementation of these schemes and the significant under-spend in the states, some of these cuts were actually inconsequential. However, this does signal the easy willingness of governments to look towards savings from welfare schemes as soon as they are under pressure to trim the fiscal deficit.

So what are some of the main considerations that the government should bring into planning its pro-poor welfare policies?

First, the new government should revisit the design of the existing welfare schemes. For instance, it is important to expand the role of state governments in planning, financing and implementing these schemes, in line with the increasingly federal character of the country. Having a former Chief Minister as the Prime Minister is a definite advantage on that count. The new government should also revisit flagship schemes such as MGNREGA to recast it as a scheme that focuses on building community-level productive assets. In other instances, there is a clear need for the government to reformulate the schemes and their reporting to focus on outputs and outcomes and not just on inputs (funds).

Second, it is implementation that the previous government so badly floundered on. Be it poor targeting, plain lack of access or mismanaging the relationship with state-level implementation bodies, there was much that went wrong with the on-ground implementation. As the UPA government continued to legislate without a concern for implementation details or capacity, it made a mockery of the poor, in whose name it ran those legislations.

Third, following from the above, the new government should focus on mundane administrative data. Whether it be on schools, clinics or toilets, birth and death registries or data on other scheme beneficiaries, administrative data is key to monitoring implementation. Better data can help identify and plug leakages; ensure better targeting and delivery; and improve the feedback loop contributing to an improvement in service delivery.

Finally, the new government must work with state governments to encourage grassroots planning and action. Gram Panchayats function with multiple constraints – few staff, limited technical capacity, lack of control over funds, etc. At the same time, there are plenty of examples where Gram Panchayats have led community action through effective implementation of schemes. Clearly, they need to be strengthened further.
Given the spectre of high inflation and the poll promises made to an impatient middle class, this government is bound to be under pressure to deliver. To deliver, especially in these times and to the middle class, seems mostly about the stock exchange indices and fuel prices. In addition to that, the big businesses that brought the current government to power will do all it can to extract its pound of flesh and push back against efforts towards expanding the government’s revenue base – taxes, rents from natural resource allocations and improving administrative capacity. This is a battle the government has to fight continuously.

The new government has the mandate and the space to make a mark with its pro-poor welfare agenda. The achievements of the state governments of Madhya Pradesh, Chattisgarh and Bihar are highly encouraging and offer important lessons for the central government. This is the time to make a strong push to ensure the new government’s agenda reflects the balance of priorities that face our country and is not hijacked by the single-minded growth hawks. In delivering better programmes more effectively, we must make all sections of society partners in progress, giving them the respect that they deserve.
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A slightly different version of this first appeared on livemint – http://www.livemint.com/Opinion/7EMonEM47ZUgzCqcmCulSM/A-boring-propoor-agenda.html

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